IDEAS home Printed from https://ideas.repec.org/a/pal/jorsoc/v64y2013i4p488-499.html
   My bibliography  Save this article

Heavy fuel oil analysis at Iraq's Bayji refinery

Author

Listed:
  • M L Zarracina

    (Cornell University, Minneapolis, MN, USA)

Abstract

This case study develops a dynamic model to analyse Heavy Fuel Oil (HFO) production and distribution at Iraq's largest oil refinery. It studies the impact of instituting a more flexible export pricing model for HFO removal, which constrains production due to physical storage limitations on refined fuel production and revenue generation. The production model utilizes system dynamics concepts and incorporates six independent, uncorrelated inputs (market prices, power outages, HFO produced, HFO removed via the power plant, local and export trucking) to effectively simulate historical trends. An export pricing model was then added to optimize the production model. Various sensitivities regarding the Iraq HFO export market to price fluctuations, time lag for prices changes to take effect, and production increases resultant of HFO storage becoming a less significant constraint were explored. The analysis reveals significant increased revenue potential, ranging from $50 million USD to $1 billion USD annually, by implementing a pricing system that adjusts HFO export prices based on HFO storage levels with minimal downside risk.

Suggested Citation

  • M L Zarracina, 2013. "Heavy fuel oil analysis at Iraq's Bayji refinery," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 64(4), pages 488-499, April.
    • Handle: RePEc:pal:jorsoc:v:64:y:2013:i:4:p:488-499
    as

    Download full text from publisher

    File URL: http://www.palgrave-journals.com/jors/journal/v64/n4/pdf/jors201267a.pdf
    File Function: Link to full text PDF
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: http://www.palgrave-journals.com/jors/journal/v64/n4/full/jors201267a.html
    File Function: Link to full text HTML
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pal:jorsoc:v:64:y:2013:i:4:p:488-499. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.palgrave-journals.com/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.